Equity Award Plans and Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Award Plans and Stock-Based Compensation

Equity Award Plans and Stock-Based Compensation

In August 1999, the Company’s Board of Directors adopted and the stockholders approved, the 1999 Stock Option Plan (“1999 Plan”). In May 2009, the Board of Directors adopted and the stockholders approved, an amendment and restatement of the 1999 Plan, the 2008 Equity Incentive Plan (“2008 Plan”). In July 2010, the Company’s Board of Directors adopted the 2010 Equity Incentive Plan (“2010 Plan,” and together with the 1999 Plan and the 2008 Plan, the “Plans”). The 2010 Plan was most recently amended by the Board of Directors on December 22, 2010 and was approved by the Company’s stockholders on January 5, 2011. The 2010 Plan became effective upon the completion of the IPO. Awards granted after May 2009 but before the completion of the IPO continue to be governed by the 2008 Plan. All outstanding stock awards granted prior to May 2009 continue to be governed by the terms of the Company’s 1999 Plan.

The 2010 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, RSU awards, performance stock awards and other stock awards. In addition, the 2010 Plan provides for the grant of performance cash awards. The Company may issue incentive stock options (“ISOs”) only to its employees. Non-qualified stock options (“NQSOs”) and all other awards may be granted to employees, directors and consultants. ISOs and NQSOs are granted to employees with an exercise price equal to the market price of the Company’s common stock at the date of grant, as determined by the Company’s Board of Directors. Stock options granted to employees generally have a contractual term of 10 years and vest over five years of continuous service, with 25% of the stock options vesting on the one-year anniversary of the date of grant and the remaining 75% vesting in equal monthly installments over the 48-month period thereafter.

The number of shares of the Company’s common stock reserved for issuance under the 2010 Plan will automatically be increased annually on January 1^st of each year, starting on January 1, 2012 and continuing through January 1, 2014, by the lesser of (a) 4% of the total number of shares of common stock outstanding on the last day of the preceding calendar year, (b) 1,965,000 shares of common stock or (c) a number determined by the Company’s Board of Directors that is less than (a) or (b).

	Options Outstanding
	Number of Options		Weighted Average Exercise Price		Weighted Average Contractual Term (Years)	Aggregate Intrinsic Value
Balances, January 1, 2012	4,684		$	10.85	5.32	$	4,318
Granted	1,657		—
Forfeited, cancelled or expired	(1,052	)	—
Exercised	(361	)	—
Balances, June 30, 2012	4,928		$	10.51	6.50	$	2,569
Options vested and expected to vest at June 30, 2012	4,417		$	10.62	6.15	$	2,557
Options exercisable at June 30, 2012	2,800		$	10.83	4.40	$	2,504

	Number of RSUs Outstanding		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Balances at January 1, 2012	137		1.74	$	1,072
Awarded	161
Released	(30	)
Forfeited or cancelled	(36	)
Balances at June 30, 2012	232		2.36	$	1,859
RSUs vested and expected to vest at June 30, 2012	161		2.27	$	1,293

The following table summarizes all stock-based compensation charges for the three and six months ended June 30, 2012 and 2011 (in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2012		2011			2012		2011
Stock-based compensation expense	$	1,235	$	1,641		$	2,684	$	3,936
Stock-based compensation associated with outstanding repriced options	16		(118		)	36		394
Total stock-based compensation	$	1,251	$	1,523		$	2,720	$	4,330

Stock-based compensation expense for the six months ended June 30, 2011 includes a charge of approximately $0.5 million relating to modification of the terms of the stock options held by certain directors who resigned from the Board of Directors during the three months ended March 31, 2011.

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options and RSUs. This model requires the input of highly subjective assumptions including the expected term of the stock option, expected stock price volatility and expected forfeitures. The Company used the following assumptions:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Dividend yield	—			—			—			—
Expected volatility	57		%	51		%	57		%	51		%
Risk-free interest rate	0.72%-0.86%			1.87		%	0.72%-1.09%			1.87%-2.14%
Expected life of options (in years)	4.5			5.0			4.5			4.75-5.0
Weighted-average grant date fair value	$	3.66		$	9.47		$	4.14		$	9.18